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Roth contributions for non-working spouse.
Old 05-11-2014, 12:06 PM   #1
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Roth contributions for non-working spouse.

I wasn't finding too much information on this topic via the forum search engine. My apologies if it has been covered in great detail already.

My situation:
My spouse recently retired.
I'm going to keep working for several more years.

My questions:
- As long as my income is above $12K/years, can we continue to contribute $6K/year into both of our Roth accounts?
- Most of our retirement is in tax deferred IRA/401K accounts. If my adjusted taxable income is below $72K, I'm considering withdrawing some money from my spouse's 401K account to contribute 100% to these Roth accounts (the full $12K). Is this a silly idea? Do you foresee any problems doing this?

Note: My long term plan is to do Roth conversions to bring our income up to $72K/year once I retire until we are both 70.

Thanks in advance for your thoughts and comments on this.



JP
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Old 05-11-2014, 12:24 PM   #2
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If one spouse is working, that income needs to equal or exceed the total put into Roth IRAs by both.
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Old 05-11-2014, 12:28 PM   #3
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Old 05-11-2014, 12:31 PM   #4
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Quote:
Originally Posted by travelover View Post
If one spouse is working, that income needs to equal or exceed the total put into Roth IRAs by both.
When you indicate "income" is that before or after any 401K or 403B deductions?

Thanks!
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Old 05-11-2014, 01:19 PM   #5
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Quote:
Originally Posted by Billk400 View Post
When you indicate "income" is that before or after any 401K or 403B deductions?

Thanks!
After pre-tax 401K or 403B deductions.
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Old 05-11-2014, 01:42 PM   #6
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If you effectively do a Roth conversion, with the 401k withdrawal amount equal to the Roth contribution, and not penalized, and taxes paid using some other already taxed source, then it's a little strange, but not crazy. You might be able to do a straight up Roth conversion and not worry about contribution limits and penalties. Or do a full or partial 401k to tIRA rollover and then do a simple tIRA to Roth conversion.

Withdrawing from the 401k, paying taxes, and contributing remainder to the Roth account is sort of a neutral transaction if your tax rates will stay the same now and throughout retirement. The Roth normally has a slight edge in this case because it can store more after-tax value per contribution than the tIRA. If the after-tax value is the same for each, then they are virtually equivalent.

As long as your earned income covers the Roth contributions you may contribute for both you and your wife.
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